Medicaid Application Finish Line Shortened
In the past several years, especially since COVID, the Medicaid application process has become more lengthy and time consuming. More documents are now required in order to achieve Medicaid approval than ever before. The 16 page application is the easy part but I always tell people that you must have your ducks in order before filing, meaning you need to have the majority of the documents needed, ideally included with the application. A new Medicaid Communication issued by the State of New Jersey puts a 45 day limit on the time to process Medicaid applications, beginning with the date the application is received. When an application has a discrepancy or insufficient information, a Request for Information (RFI) letter will be sent detailing the documentation needed. The applicant then has 14 days to comply or the application will be denied. The State does allow for extensions of time in the case of what it terms, but does not define, as “exceptional circumstances”. The MedComm does also state that if the applicant requests additional time and continues to cooperate in good faith, an additional amount of time may be granted. A few counties have operated under a 45 day time limit for some time before this MedComm was
Increase in Medicaid Divisor
As I have written about frequently in this blog, when applying for Medicaid an applicant must establish by documentary evidence that he or she did not transfer assets in the 5 year period directly before the requested start date for benefits. Any transfers made for which product or service of equal value is not received - what are called transfers for less than fair value - carry a Medicaid penalty or waiting period for benefits. The more money transferred the longer the waiting period. Another number, however, also affects the Medicaid penalty. The Medicaid divisor is the number which a transfer is divided by to calculate the penalty. The divisor is what the State deems to be the average cost of nursing home level care statewide as a daily rate. A higher number results in a lower penalty. Because the cost of care does continue to climb, each spring the number is adjusted and this year is no different. Last month New Jersey announced the penalty has increased from $361.20 to $374.39. On a monthly basis this equates to $11,387, meaning every $11,387 transfer for less than fair value results in a 1 month Medicaid penalty. With the rate of inflation up near 9% one would think that the divisor increase
Estate Administration to Pursue Legal Claims – Part 3
In last week’s blog post I talked about a call from an attorney who needed help. He was handling a wrongful death claim on behalf of the children of a father who had died of injuries suffered in a car accident. I was able to get the son appointed administrator ad prosequendum which allowed him to sign the papers accepting the settlement on behalf of his father’s estate. As I explained last week, because that appointment was for a limited purpose we then had to file an application for the son to be appointed general administrator. This time the judge required a bond for the protection of the heirs and creditors. Dad had been a Medicaid recipient living in a nursing home at the time of his death so administering the estate was relatively easy, however, the one potential creditor was the State of New Jersey. Under Medicaid estate recovery laws, the State can recoup from the estate benefits it paid out during the recipient’s lifetime. No one could recall, however, receiving the estate recovery questionnaire that is mailed out after death and the attorney did not recall advising the State of the claim. Additionally, it was now six years after death. The length of time it took to
Estate Administration to Pursue Legal Claims – Part 2
In last week’s post I referred to a recent case in our office in which an administrator ad prosequendum was needed with respect to an estate whose only potential asset was a legal claim for damages resulting from a wrongful death. Not knowing how much might be recovered and there being no other estate asset, appointing an administrator for the limited purpose of pursuing the claim is the best option. So what is the process and who can be appointed administrator ad prosequendum? New Jersey court rules establish that the surrogate’s court of the county where the intestate (person who died without a will) resided or, if not a New Jersey resident, the surrogate’s court of the county where the accident resulting in the death occurred grants letters of administration ad prosequendum. The persons entitled serve are those closest in relation to the intestate. First right would be the surviving spouse or domestic partner, if any, and then the remaining heirs or some of them. In our case there was no surviving spouse or partner but there were four children. Since each would have equal right to serve, anyone not wishing to serve needs to sign a renunciation. Alternatively, an application by the person wanting to serve must
Estate Administration to Pursue Legal Claims – Part 1
We recently received a call from a personal injury attorney in need of help. The attorney had pursued a wrongful death claim on behalf of the children of their father who died in motor vehicle accident. Their father had no assets at the time of his death and in fact was a Medicaid recipient. Because, in wrongful death actions, there typically is a claim brought by the estate in addition to one by individual family members, an executor or administrator needs to be appointed to pursue - or prosecute - the claim on behalf of the estate. Dad left no will, however, so no executor could be appointed. No administrator had to this point been appointed because, as I related, there had been no need for one. Dad had no assets so there was no reason to go thru the estate administration process. While the value of the claim could not yet be determined with any certainty, the attorney believed the claim had value but needed someone to be able to sign necessary documents and make decisions about the claim on behalf of the estate. Enter someone called an administrator ad prosequendum. The term “ad prosequendum” is a Latin term meaning “for prosecution”. An administrator is appointed for the limited
Changing Distributions After Death – Part 3
In my last two posts I have been talking about the challenge of redistributing an inheritance after death. Many people assume that they are free to accept the sum bequeathed to them or not and that is absolutely true. But as I explained last week, there are tax ramifications, specifically gift tax. The annual gift tax exclusion can be a way to avoid gift tax but what if the amount to be redistributed is too large? Let’s say there are two children, A and B. A wants to give his $300,000 bequest to his brother. Using the annual gift tax exclusion, it could take 5 to 15 years to complete the gift, depending on whether A or B or both are married. (See my post last week.) Another option is for A to disclaim the assets he wants to direct to B. A disclaimer is a legal statement that A does not wish to receive the inheritance being disclaimed. A qualified disclaimer - one filed within 9 months of the death of the decedent who made the bequest - makes it so that the person disclaiming is treated as never having received it for tax purposes. It is as if that person predeceased - died before - the decedent. In this way,